Savvy women include property in their retirement plans

Women are retiring with around half as much superannuation (53%) as men, according to recent research by the Australian Services Union in collaboration with think tank Per Capita.

This is probably the reason why more women are including property investment in their retirement and wealth creation strategies. Nearly half (47%) of Australians who own investment property are women according to the Australian Taxation Office (ATO), which has analysed data by the Property Council of Australia.

Hardly surprising when it is a well-known fact, women still generally earn less than men do. In fact 28.7% less in ASX 200 organisations and 16% less across all companies and occupations according to the Workplace Gender Equality Agency. In addition women often lose out paying into their superfund when they take time out of their working life to bring up children.

So savvy women are looking elsewhere to make their money work for them – and it looks like property investment is one of those places.

As well as helping with strategies to supplement their superannuation, property investment can help women (and men!) in other ways when working towards their financial dreams.

Here are a few of them:

Benefiting from the tax deductions

The canny investor often negatively gears a property while they’re earning so they can take advantage of the tax deductible benefits. And with property investment, there are many.

These may include the interest on the loan, council and strata rates, pest control and landlords’ insurance but to name a few.

For some people, having tax deductible benefits may help reduce assessable income and tax payable, meaning they may well end up with a lower tax bill. This money can be invested elsewhere – such as be used to top up a super fund.

Indeed, the ATO analysis shows it’s mainly women property investors who take advantage of this; of those who earn less than $80,000/annum and negatively gear their investment properties, 55% are women.

Earning an income

For those who decide not to negatively gear their property, once the tenants are in place and they have a good property manager, they receive an income for what is realistically very little time and effort.

Yes, you will be taxed on that income (although you will have benefited from some tax deductions), but this extra cash can now be used for other things – such as topping up a superfund or enjoying a holiday.

Watching the asset grow

Property investment has the potential of a good return for people wanting to reap rewards at the end of a few years. Generally, property prices go up over a number of years, far more so than sticking it in a high interest savings account.

There is always a risk of a market downturn, but this will only affect you if you want to sell at this time. For the majority of investors, they just wait until the market picks up, continue benefiting from an additional income and/or the tax deductions, and then sell.

Or the really savvy investor will use that growth to borrow against and buy another investment property!

Property investment really can help with strategies for retirement saving, and can be a genuine opportunity for women if their super is low. So, do your research, learn the pros and the cons, speak to financial specialists, and understand the risks involved. Once you know your budget, come to us.

We have been managing properties for landlords just like you for over 40 years – we will ensure your investment is property maintained and cared for, and you get the best rental income.

If you are looking for a property management agent, would like to know what you have to do to increase the rental potential of your property, or even just want to know a bit more about property investment, our knowledgeable and experienced team would love to help.

As one of Newcastle’s longest established real estate offices, we have helped thousands of people realise their financial dreams through property. Give us a call on 02 4954 8833 or pop into our Cardiff office for a chat.